The rule of 72:Getting into something with compounding high...

The rule of 72:

Getting into something with compounding high growth potential when you are young has to be a great move if all goes well.

Compounding returns are amazing and the rule of 72 is a good one to know to quickly calculate the possibilities.

If you don't know the rule you simply divide 72 by the rate of return and you have the number of years it will take to double your money.

$4,000 will double every 6 years at a 12% return.

A company like VMT that is in an industry that is growing but more importantly in a sector of that industry that currently has a small share of the total pie but is set to have the major part of the pie by the time your son needs a house will easily grow profits at a compound rate of 36%. That would double the investment every two years.
and your son could find himself with $4m. in 20 years time.

Capital gains tax will reduce that to $3m.

The rule of 72 tells us that if house prices rise at 7.2% the cost of a house will double every 10 years. So he will likely have enough to buy a house that costs $750k today.

Sounds crazy but my wife and I bought our first Apartment for $6,000 .

Of course if your son put his money in the bank and earned 3.6 % interest he would only double his money once in 20 years and end up with enough for a hair cut.